Medicare Part D

Earn Over $109K? Here's How IRMAA Hits Your 2026 Medicare

SANTA CRUZ, Calif. — If your 2024 tax return showed income above $109,000 as a single filer (or $218,000 filing jointly), the Social Security Administration is about to send a letter that catches many retirees off guard. It's called an IRMAA notice, and it means you'll pay more for Medicare Part B and Part D in 2026 than your neighbor down the street. With the Annual Enrollment Period running from October 15 through December 7, now is the time to understand how income affects what you'll owe next year.

What IRMAA actually is

IRMAA stands for Income-Related Monthly Adjustment Amount. It's not a penalty — it's an extra charge added to your standard Part B and Part D premiums if your income is above a certain level. Most people on Medicare don't pay it. But if you're a higher earner, Social Security will send you a letter each fall spelling out what you owe for the following year.

The surcharge is based on your Modified Adjusted Gross Income (MAGI) from two years earlier. So your 2026 IRMAA looks at your 2024 tax return. That two-year lag surprises a lot of people, especially those who recently retired.

The 2026 income thresholds

For 2026, IRMAA begins above $109,000 for a single filer and above $218,000 for a married couple filing jointly. From there, the surcharge climbs in tiers — the higher your income, the bigger the add-on. The top tier applies to single filers with income at or above $500,000 and married filers at or above $750,000.

The same income brackets determine both your Part B surcharge and your Part D surcharge. If you owe IRMAA, you owe it on both parts, even if you get your drug coverage through a Medicare Advantage plan that bundles it in.

How you pay it

The Part B surcharge is usually deducted from your Social Security benefit, right alongside your standard premium. The Part D surcharge is billed separately by Medicare — not by your drug plan — even though your regular Part D premium still goes to the plan. That split billing confuses a lot of people, so keep an eye out for both.

If your income has changed

Here's the part many Santa Cruz retirees miss. If a "life-changing event" has cut your income since 2024, you can ask Social Security to use more recent figures. Qualifying events include retirement, the death of a spouse, marriage, divorce, or the loss of a pension. The form you need is SSA-44, and you'll submit it with proof of the change.

This matters because someone who sold a business or took a large IRA distribution in 2024 could see a temporary income spike push them into IRMAA territory for 2026 — even though their actual retirement income is far lower now.

Where Part B and Part D stand in 2026

Beyond IRMAA, there are two Part D changes worth knowing. The annual out-of-pocket cap on covered prescription drugs is $2,100 for 2026. Once you hit that limit, you pay nothing more for covered drugs the rest of the year. The maximum Part D deductible any plan can charge is $615.

There's also the Medicare Prescription Payment Plan, an optional program that lets you spread your drug costs into monthly payments instead of paying a large amount at the pharmacy counter. It doesn't lower what you owe overall, but it can smooth out the timing.

Getting local help in Santa Cruz

Santa Cruz is in Santa Cruz County, where residents can compare available Medicare Advantage and Part D plans through medicare.gov's Plan Finder. For unbiased, one-on-one help understanding an IRMAA letter or weighing coverage choices, California's SHIP program — called HICAP locally — offers free counseling to Medicare beneficiaries.